*Chapter 2 Deteriorating Food and Oil

Security

*20th Century was the oil century

*1900 – the world produced 150 million barrels of oil

*28billin barrels

*180 fold increase

*Cheap oil enabled food production explosion along with population, urbanization, mobility

*1900 30% in cities – today 50%

*Grain harvest increased 400% in 20th cent

*Mobility exploded – cars, trains, planes

*Today – an oil based civilization

* PRODUCTION SOON FALLING

* 1981 was the peak of new discoveries

* 2006 – world pumped 38 billion barrels but discovered only 9 billion new

* World reserves in free-fall

* Half of world reserves used up – 1 trillion left

* FIRST TRILLION WAS EASY OIL

* WHAT’S LEFT IS TOUGH OIL

* DEEP

* OFF SHORE

* UNFRIENDLY COUNTRIES

* PEAK OIL IS AT HAND

* THIS IS A TOTALLY DIFFERENT WORLD

* ZERO SUM GAME OVER OIL

*Food and oil are hugely linked

*1950-72 bushel of wheat could be traded for barrel of oil - $2

*In late 2007 took 8 bushels of wheat to buy 1 barrel of oil

*Grain now pegged to Oil – over $60 / barrel is highly productive

*2006 16% of crop went to fuel

*2008 could be 30%

*WORLD PRICE OF GRAIN MOVING TO OIL PRICE EQUIVALENT

*Food will shift into fuel economy

*PEAK OIL IS UPON US

*New production follows new discovery by about 40 years

*1970 US produced 9.6 million bpd

*2006 5.1 million bpd

*47% decline

*Venezuela peaked

*UK Peaked 2000

* Pre-peakers – Russia – WORLD’S LARGEST PRODUCER

*Eclipsed Saudi Arabia 2006

*Canada – deadly tar sands

*Kazakhstan

*Algeria

*Angola

*Brazil

*Nigeria

*UAE

*Libya

* Approaching production decline

*Mexico

*US 2nd largest suppliers

* 2004 3.4 million barrels per day

*Key field in steep decline

*Could be importer by 21015

*China

*Saudi Arabia

*Largest field is 50 years old

* 2007 production of 8.9 million barrels down 6%

*Can pre-peak countries make up the difference for the rest?

*Major oil companies

* Have not been any dramatic increases in exploration and development

* Seems that 95% of world’s oil already discovered

* Whole world has been seismically searched

* Extremely unlikely new fields to be found

* World demand increases annually 2m bpd

* Old fields decline annually 4m bpd

* Needs a whole new Saudi Arabia every few years – NOT SUSTAINABLE

* IF THE OIL CO’S HAD GOOD PROSPECTS THEY’D BE DEVELOPING THEM

* WORLD PRODUCTION OF 85M BPD DECLINED IN 2007

* Of the top 20 fields ever discovered

* 18 discovered between 1917 and 1970’s

* NONE HAS COME SINCE THE 1970’S

* THE AGE OF DIRTY, DANGEROUS, COSTLY OIL?

* We can expect to drop to 67 million bpd by 2020 – a 21% drop

* Oil supply per person drop of 32% in just 14 years

* The 5% of conventional oil left

* Arctic as it melts

* Alaska

* Deep deep deep

* TAR SANDS AND OIL SHALE and carrageen

* Alberta – 1.1 trillion barrels

* Venezuela – .4 trillion barrels

* Rockies oil shale – carrageen

* SEVERAL BARRELS OF WATER FOR EACH BARREL OF OIL

* ALBERTA TAR SANDS – 7% US OIL NEEDS – 1.4 MILLION BPD

* TAR SANDS ARE OUR DEATH

*Highly carbon intensive production – extensive use of natural gas

*2 tons of sand for 1 barrel of oil

*Net energy yield is low – 2 out of each three barrels for just production – 3X DIRTIER

*MASSIVE LAND DESTRUCTION

* WHEN PRODUCING COMPANIES AND COUNTRIES FACE THE FACT OF

REDUCTION –

*THEY’LL RATION

*PRICES WILL DRIVE UP

* EFFECT ON FOOD SUPPLY / COST OF FOOD

* AGRICULTURE MASSIVELY OIL DEPENDENT

*Tractors

* Irrigation pumps

*Fertilizer

*Phosphate and potash mining

*Developing countries moving from draft animals to tractors

*Fertilizer uses 20% of farm energy use

*Urbanization necessitates fertilizer replace human waste

*World food shipments send nutrients elsewhere

* nutrients: nitrogen, phosphorus, and potassium

* Irrigation – manor energy user – INCREASING as water tables drop

*US – 19% of farm energy use

*India – water tables falling. 50% of ALL electricity for pumping water from wells!!!!!

*No-till farming is helping

*Agriculture accounts for 1/5th of energy in us food system

*Transport

*processing,

*packaging,

*marketing, and

*kitchen preparation

* US food economy uses as much energy as entire UK economy

*12% for transportation from farm to consumer

*Air transport of food – fruit, etc – has exploded

*16% canning, freezing, drying

*Future of long distance transport

*Days of the 3000 mile ceaser salid is ending

*Packaging – 7%

*Can cost more than the food

*An empty cereal box EMPTY would cost about the same

*KITCHEN IS THE GREATEST ENERGY CONSUMER

*COOKING

*REFRIGERATION – ELECTRICITY

* OUR OIL BASED GRAIN PRODUCTION CANNOT SURVIVE

*1950-1973 GRAIN HARVEST INCREASED 2X, MORE THAN SINCE THE BEGINNING OF AGRICULTURE

*1950-1990 SCIENCE RAISED YIELDS FROM 1.1 TO 2.5 TONS PER HECTARE

*SINCE 1990 GROWTH SLOWED FROM 2.2% INCREASE TO 1.1% INCREASE

*THE EASY STEPS WERE DONE

* CAUSES OF THE 23 YEAR PRODUCTIVITY RISE

*IRRIGATION

*FERTILIZER USE GROWTH

*HIGH YIELDING VARIETIES OF GRAIN – CORN, WHEAT, RYE

*GRAIN INCREASE NOW FALLS BELOW POPULATION GROWTH SINCE 1994

*PRODUCTION PEAKED IN 1984

*12% DROP PER PERSON

* GROWTH IN SOYBEAN HARVEST IS WHAT HAS AVERTED MASS HUNGER

*LIVESTOCK, FISH AND POULTRY SUPLEMENT

*SOY IS DOMINANT IN WORLD AGRICUTLTURE – METEORIC

*BY 1990 MORE LAND USED BY SOY THAN WHEAT

* BUT WHEAT, RICE AND CORN EXPANSION IS MOST CRUCIAL TO AVERT

WORLD HUNGER

* 7 OUT OF 8 OF THE LAST YEARS PRODUCTION HAS FALLEN BELOW CONSUMPTION

* GRAIN RESERVES ARE AT THEIR LOWEST LEVEL IN 34 YEARS

* COMBINED 3 DAMANDS ARE OVERWHELMING FARMERS –

* 78M NEW PEOPLE PER YEAR

* BILLIONS MOVING UP THE FOOD CHAIN

* FOOD BEING SHUNTED TO FUEL

* FARMERS FAICING NEW CONSTRAINTS

* 50 YEAR IRRIGATION EXPANSION HAS ENDED

* IRRIGATION SHRINKING

* WELLS GOING DRY- WATER TABLES FALLING

* WATER DIVERTED TO CITIES

* CHINA’S WHEAT HARVEST HAS DROPPED BY 20%

* FOR EVERY 1 DEGREE RISE IN TEMPERATURE – 10% DECLINE IN GRAIN

YIELDS

*MORE EXTREME WEATHER EVENTS

*MORE INTENSE DROUGHTS

* CONVERSION OF CROPLAND TO NON-FARM USES

*ACCELERATING

*URGAN SPRAWL

*INDUSTRIALIZING COUNTRIES LIKE CHINA

*CONSTRUCTION OF HOMES, FACTORIES, ROADS, HIGHWAYS, PARKING LOTS

* CARS AND PEOPLE COMPETE FOR CROPS

*WHEN OIL JUMPED ABOVE $60 PB 2005 ETHINOL INVESTMENT EXPLODED

*GRAIN USED IN ETHANOL DOUBLING

* 1/5TH OF US GRAIN NOW GOING TO FUEL

*LESS THAN 4% OF US FUEL

*BRAZIL USING HALF OF ITS SUGAR CANE HARVEST INTO FUEL

*EUROPE USES BIODEISEL –

* INCREASING TURNING TO PALM OIL INDONESIA AND MALASIA

* Causing massive deforestation

* Netherlands withdrawing from the practice to avoid climate destruction

*2-billion-ton world grain

harvest 2006

*Corn, now the world's dominant feed grain as well as the leading ethanol feedstock, overtook wheat roughly a decade ago

*World corn harvest exceeded 700 mil lion tons

*Wheat was just under 600 million tons

*Rice was 420 million tons

*85 percent of the 2-billion-ton world grain harvest

*U.S. corn production is

huge, accounting for 40 percent of

the global harvest and two

thirds of world corn exports

*The corn harvest of Iowa, the leading corn-producing state, exceeds the entire grain harvest of Canada

*Iowa is also the epicenter of

ethanol distillery construction

*Planned Iowa distilleries 2.7 billion bushels

*Total Iowa corn harvest only 2.2 billion bushels

*Japan, Egypt, and Mexico leading importers

*Ethanol distillation drives

up world food prices

*September 2007 food prices nearly doubled 2 years earlier

*Wheat prices more than doubled

*Soy up more than half

*Massive hardship where grain is a

staple

*Mexico

*2007 tortilla price up 60%

*Crowds of 75,000 protested

*Government price controls instituted

*Italy – pasta boycotts

*UK worrying about rising bread prices

*The grain required to fill an

SUV's 25-gallon tank with ethanol

just once will feed one person for a whole year

*If the entire U.S. grain harvest

were to be converted to

ethanol, it would satisfy at most 18

percent of U.S. automo tive fuel

needs

*In this new situation the

world price of grain is driving

up toward its oil-equivalent value

*The emerging competition between the owners of the world's 860 million automobiles and the 2 billion poorest peo ple is uncharted territory for humanity

*The average income of the world's automobile owners is roughly $30,000 a year

*Although there are no

alternatives to food for people,

there are alternatives to

using food-based fuels

*The 4 percent of U.S. automotive fuel currently supplied from ethanol could be achieved several times over—and at a fraction of the cost—simply by raising auto fuel-efficiency standards by 20 percent

*Other ways to leave food to feed

people

*Electric cars and plug-in hybrids

*Wind for the gaso line equivalent of less than $1 a gallon

*fuel from fast-growing trees, switchgrass, prairie grass mix tures, or other cellulosic materials, which can be grown on wasteland

*Jatropha - golf ball-sized fruit with seeds containing oil that can be turned into biodiesel - Jatropha diesel can be produced for $43 per barrel

*The World Beyond Peak Oil

*Few countries are planning for a reduction in oil use

*U.S. Department of Energy expect world oil consumption to go from roughly 85 million barrels or so a day at present to close to 120 million barrels a day by 2030??!!?!?!??!

*Modern cities are another product

of the oil age

*Until 1900, urbanization was, with a few exceptions, a slow, barely perceptible process

*When the last century began, there were only a few cities with a million people. Today there are more than 400 such cities, and 20 mega-cities have 10 million or more residents

*The metabolism of cities depends on concentrating vast amounts of food, water, and materials and then dispersing the resulting garbage and human waste

*"There will eventually be a

great scramble to get out of the

suburbs as the world oil crisis

deep ens and the property values

of suburban homes plummet."

*The food sector will be affected in

two ways

*Food will become more costly

*Diets will be altered as people move down the food chain. Diets will thus become more closely attuned to local products and more seasonal in nature.

*Cheap airfares may soon become

history

*Air freight may be hit even

harder, perhaps leading at some

point to an absolute decline

*The coming downturn in oil

and to plan for it even though it

will become one of the great fault

lines in world economic history

*Developing countries will be hit doubly hard

*United States burns more gasoline than the next 20 countries combined

*Will world popula tion growth survive a continuing decline in world oil produc tion?

*How will a shrinking oil supply be allocated among countries? By the market? By negotiated international agree ments? By war?

*Can civilization itself survive the stresses asso ciated with falling oil production at a time when food prices are rising and the stresses from climate change are mounting?

*Food Insecurity and Failing States

*50 years of hunger reduction is now being reversed

*2007, James Morris, head of the U.N. World Food Programme (WFP), announced that 18,000 children are now dying each day from hunger and related causes

*The number of people in developing countries who are hungry and malnourished, which declined from 960 million in 1970 to 800 million in 1996, has turned upward, reaching 830 million in 2003

*One of the manifestations of

a sharp rise in grain prices is a correspondingly

sharp drop in food assistance

*United States, by far the largest food aid donor, saw the price of a ton of food aid in 2007 climb to $611, up from $363 per ton in 2004

*FAO and WFP each year release an assessment of crop and food conditions that lists the countries in dire need of food assistance.

*In May 2007, a total of 33 coun tries with a combined population of 763 million were on this list.

*17 were in need of external food assistance because of recent civil strife and conflict.

*top 20 list of failing states, including Afghanistan, Burundi, Cote d'lvoire, the Democratic Republic of the Congo, Guinea, Pakistan, Somalia, Sudan, and Zimbab we

*The most immediate threat

to food security may be the

diversion of an ever-larger share of the U.S. grain harvest into the

production of fuel for cars